Valuing points/miles math equation question

Discussion in 'Other Credit Card Programs' started by SuperKirby, Apr 6, 2013.  |  Print Topic

  1. SuperKirby

    SuperKirby Gold Member

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    I'm no mathematician, (i think i'm at a 4th-5th grade level?), heck look at me, i'm a dog. So I was wondering how much I actually value my points and miles? I.e....

    I earned 60K UR points from spending $39K last year. So I value my Chase Sapphire Pref card at 1.54 cents/mile. I transferred them to UA.

    I spent 60K UA miles to CDG (Paris) last year on roundtrip worth $1500 if bought, so I value my UA points at 150,000/60,000 = 2.5 cents/mile

    What's the equation for my overall value of my Chase card when combined with UA? Is it simply adding the two together? (Sorry if this seems like a silly thread)
     
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  2. NYCUA1K

    NYCUA1K Gold Member

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    You do not need to add or combine the two rates because they represent two different things. You "purchased" (input) the miles as UR points through your spend on the Chase Sapphire for what you estimated to be 1.54 cents/mile (cpm), and then you redeemed (output) those miles for 2.5 cpm. Assuming your estimates of those rates to be correct, it means that the "value" of UR points as UA miles increased by 62% compared of their "value" in miles earned as UR points. One way to look at this is that if you had purchased 60K miles at the rate (1.54 cpm) that you had earned them on the Sapphire as UR points, you would have been able afford a $924 ticket and not the $1,500 RT ticket to CDG that you purchased for 60K with UA miles.

    The above assumes that I understood the question or situation correctly, but it remains that the two rates represent different things. This is unusual because miles or points generally tend to lose their "value" on the redemption side, but you seem to have come out ahead...by 62%!
     
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  3. HaveMilesWillTravel
    Original Member

    HaveMilesWillTravel Gold Member

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    60k points / $39k cannot be $/point, it must be points/$.

    You earned on avg 1.54 points per dollar spent on your card. That has nothing to do with value. (I earned 6 HHonors points per dollar yesterday at the grockery store, did I get a better value because 6 >> 1.54?)
     
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  4. NYCUA1K

    NYCUA1K Gold Member

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    I had wondered about where the 1.54 cpm had come from because I divided $39K by 60K and did not get 1.54 cpm, so I assumed that the rate was determined somewhere in the conversion from UR points to UA miles. I should just have inverted the division, which, you are right, is incorrect. No wonder it seemed unusually good that miles actually became more valuable on redemption. ;)
     
  5. SuperKirby

    SuperKirby Gold Member

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    Ahh, thats why I was confused, I keep interchanging them because to me, all my UR points are UA points anyway (I don't transfer UR points to anywhere else). But NOW I understand they are two very separate things. thanks both!

    And yes, the CDG trip last year was a steal! I never had such a great award rate in my life. (It's still the same rate this year! - OKC to CDG)
     
  6. NYCUA1K

    NYCUA1K Gold Member

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    How well you did depends on how much UA was selling their miles for at the time. TPAC miles are now selling for 2.1 cpm and US domestic for 2.9 cpm. The rate to CDG would probably be somewhere in between but if it is like the TPAC rate of 2.1 cpm then you paid a bit more because 60K miles would have cost $1,260 whereas you would have paid $1,500 had you purchased the miles at your rate of 2.5 cpm. The exercise gets murky because it is unclear how much it cost you to get the 60K UR points since your spend of $39K included all kinds of things...
     

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